How Higher Education Is Vulnerable To Disruption

According to Harvard Business professor Clayton M Christensen, the way disruptive forces change an industry is by moving into areas of a market that the established players don’t consider important. This can be because the area is new, or because the profit margin is too low to be concerned about. What happens though is the new players take over the low end and then migrate up the value chain, eventually eating the established players market share. This is what happened with Blockbuster Video. They discounted the new streaming format in the home video market and thus were eaten.

It is hard for people to look at the existing multi billion dollar university system and see any sort of threat. I mean, some of these schools have been around for hundreds of years. Even so, on a historical time scale that doesn’t mean much. Ancient Egypt was around for thousands of years and yet they are but a shadow of their former glory. Nothing built by man can endure the march of time. Entropy is a natural law.

I have spent a lot of thought about where Higher Education could be vulnerable to disruption. Then I saw two articles that sparked an idea.

Degreed, a San Francisco startup taking on traditional degrees and diplomas with a digital credential that reflects lifelong learning, has recruited its first corporate partner to its corner.

This week the startup said it will launch a partnership with Microsoft Virtual Academy, the tech giant’s online IT training site, which will give students who complete the program’s classes a way to display their achievements on Degreed.

What is interesting about Degreed is they are building a platform to support life long learning. Most universities are designed for, and only peruse students looking for a traditional four year degree. 50 years ago that that period of learning was sufficient for your whole work career but it’s not anymore. Things change too fast. Even the courses offered aren’t keeping up with the variety of changes happening in the technology field.

But that straight pathway isn’t the one taken by about half of the students enrolled in college today, an enrollment pattern that Clifford Adelman, a noted higher-education researcher, says dates back to at least the 1970s. Even so, we still call students “nontraditional” if they attend college later in life or part-time, or if they attend multiple institutions.

Today’s students are swirling through higher education more than ever before. They attend multiple institutions—sometimes at the same time—extend the time to graduation by taking off time between semesters, mix learning experiences like co-op programs or internships with traditional courses, and sign up for classes from alternative providers such as Coursera or edX, which offer free massive open online courses (MOOCs), or StraighterLine, which offers cheap introductory courses online.

This trend will only increase as more and more careers are disrupted by technology. Workers will constantly have to reinvent themselves to stay relevant and desirable. The new generations of workers though are used to mashing things up. They don’t buy whole albums of songs, they are used to picking and choosing. I think this will change the way they want to learn.

That is the vulnerability. Part time learners aren’t going to pay huge tuition costs and therefore will seek alternatives for learning. Many universities don’t seem to care about them so what you have is a new market for learning and new players stepping up to help manage it all. This is a classic disaggregation of learning from the individual university to the cloud of universities.

In the end, the lifelong learner model will dwarf the traditional four year model. The money won’t all come at once but over a life it will add up. These new education providers are playing a long game, looking far beyond just the next semester. Eventually, they will eat the market for traditional four year schools too. I’m not saying that all universities will go away. What I’m saying is they will be just one of many providers of content and credentialing and will lose their gatekeeper status of social sorting.

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[…] don’t tend to serve vocational needs and also don’t care about life long learning. I’ve written about this too. Once MOOCs develop new teaching technologies in vocational schools, they can start to make their […]